UTAH POWER & LIGHT COMPANY, APPELLANT V. IDAHO PUBLIC UTILITIES
COMMISSION, ET AL.
No. 86-1656
In the Supreme Court of the United States
October Term, 1987
On Appeal From the Supreme Court of Idaho
Brief in Support of Motion to Dismiss
TABLE OF CONTENTS
Opinions below
Jurisdiction
Question Presented
Statement
Argument
Conclusion
OPINIONS BELOW
The opinion of the Supreme Court of Idaho (J.S. App. 1a-25a) is
reported at 112 Idaho 10 and 730 P.2d 930. The opinion of the Idaho
Public Utilities Commission (J.S. App. 30a-56a) is unreported.
JURISDICTION
The judgment of the Idaho Supreme Court was entered on November 26,
1986. A petition for rehearing was denied on January 16, 1987 (J.S.
App. 26a-27a). The notice of appeal (J.S. App. 61a-64a) was filed on
April 13, 1987, and the appeal was docketed on April 15, 1987. The
jurisdiction of this Court is invoked under 28 U.S.C. 1257(2).
QUESTION PRESENTED
Whether appellant, an electric utility company that has a
certificate of public convenience and necessity authorizing the
delivery of energy in a geographic area that includes a United States
Department of Energy (DOE) facility, was deprived of its rights under
the Fifth and Fourteenth Amendments by the Idaho Public Utilities
Commission's determination that a second utility company is also
authorized to supply energy to the DOE facility and that the second
utility -- which is now satisfactorily serving the DOE facility -- has
the right to continue to provide that service.
STATEMENT
1. Since 1949, the Department of Energy (DOE) /1/ has owned and
operated, directly or through contractors, the Idaho National
Engineering Laboratory (INEL). The INEL is a 900-square-mile nuclear
research facility located in five counties in southeastern Idaho. /2/
Electric service in that area of Idaho was first provided by
appellant, a utility company authorized to provide such service under
Idaho law. During the 1940s, appellant was the exclusive supplier of
electricity to the Naval Proving Grounds, the federal facility that
preceded the INEL. Appellant also provided electric power to the INEL
during the first year of the laboratory's existence. J.S. App. 2a,
35a-36a.
In 1950, DOE appellant, and appellee Idaho Power Company (IPC),
with the approval of the Idaho Public Utilities Commission (IPUC),
entered into a three-party agreement for the provision of electric
service to the INEL. Under that agreement, which designated DOE as
"'buyer,'" IPC as "'seller,'" and appellant as "'a party of the second
part'" (J.S. App. 2a), IPC agreed to "'supply or stand ready to
supply() the full amount of (DOE's) power requirements,'" up to 20,000
kilowatts, and appellant agreed "to construct and maintain a 132 KV
transmission line" to deliver the electricity (id. at 35a). In a
separate two-party agreement, IPC and appellant established a "'pool
account'" into which DOE's payments for their respective services were
deposited by IPC and from which the utilities withdrew periodic
disbursements. J.S. App. 3a, 35a.
In 1957, the three-party agreement was amended to provide for DOE's
increased power requirements. The amended agreement stated that
"'(s)eller (Idaho Power), in cooperation with (appellant) shall sell
and deliver to buyer * * * all electric power required by buyer * * *
up to 40,000 kw'" (J.S. App. 35a-36a). The two-party agreement
between IPC and appellant was amended at the same time to reflect the
increased power requirements (id. at 3a, 36a). /3/
During the first 19 years that the three-party agreements were in
effect, both IPC and appellant had certificates of public convenience
and necessity authorizing the provision of electric service in four of
the five counties in which the INEL is located. Only appellant had a
certificate of public convenience and necessity to supply electric
service to customers in Butte County. In 1969, IPC obtained a
certificate of public convenience and necessity for Butte County from
the Idaho Public Utilities Commission. The certificate stated that it
was "'limited to the transmission, interchange and supply of high
voltage electric power and energy.'" J.S. App. 3a; see also id. at
53a-56a.
2. On January 30, 1985, the Department of Energy petitioned the
Idaho Public Utilities Commission for a declaratory ruling that IPC
would have the right to be sole supplier of electricity to the INEL
upon termination of the three-party agreement. Following "extensive
discovery," "direct and rebuttal testimon(y)," and a public hearing,
the Commission granted the DOE petition (J.S. App. 30a-52a).
The Commission rejected appellant's contention that IPC had no
authority to serve customers in Butte County because the 1969
certificate of public convenience and necessity simply granted IPC the
authority to construct and maintain a transmission line across the
county. The Commission stated that "(w)hile Idaho Power's certificate
gave it no general grant of authority to serve all customers in Butte
County, it nevertheless allowed it to supply power and energy at the
transmission level, and there was one customer for whose benefit this
was obviously done: DOE" (J.S. App. 46a (emphasis in original)). The
Commission found that IPD in 1969 obtained "a valid Certificate of
Public Convenience and Necessity to serve customers in Butte County at
transmission levels" and that IPC "is currently serving the entire DOE
load" (id. at 49a (emphasis in original)). "When two utilities, both
of whom have the legal right to serve a particular area, are vying to
serve that area," the Commission stated, "the utility that is
currently and satisfactorily serving the disputed area may continue to
do so" (ibid.). The Commission concluded that IPC had the right to
continue to serve the DOE facility. /4/
3. The Idaho Supreme Court upheld the Commission's determination by
a divided vote (J.S. App. 1a-25a). The majority rejected appellant's
argument that a state statute designed to prevent "'pirating' away of
customers of competing utilities" precluded IPC from serving the DOE
facility without first obtaining appellant's consent (id. at 7a).
That argument was unavailing "in this unique factual situation," the
court held, because the present case involves "delivery to a special
contract customer (DOE) in a situation where both utilities had
authority to deliver energy * * * and (,) more importantly, where
there is a history * * * show(ing) that Idaho Power was, and has been
for a long number of years, the primary supplier of the energy to DOE"
(id. at 7a-8a).
The court also held that the Commission's decision that IPC is
entitled to serve DOE upon the termination of the three-party
agreement is "supported by substantial and competent evidence and
(that) there has been demonstrated no clear abuse of discretion" (J.S.
App. 10a). "There is ample evidence in the record," the court
concluded, to sustain the Commission's finding that IPC's certificate
of convenience and necessity permits it "to supply the power and
energy at transmission level for the benefit of one customer -- DOE"
(id. at 9a (emphasis in original)). And "the commission correctly
decided that, as between two utilities with valid certificates to
deliver energy at transmission voltage, the utility that is currently
and satisfactorily serving the disputed area may continue to do so"
(ibid.). /5/
Justice Bakes dissented (J.S. App. 11a-25a). Like the majority, he
viewed the facts in this case as "somewhat unique" (id. at 13a). He
concluded, however, that the Commission's factual findings "are not
supported by substantial competent evidence" (id. at 25a). In Justice
Bakes' view, IPC's certificate of public convenience and necessity did
not authorize IPC to provide power to the DOE facility (id. at
20a-25a).
Justice Bakes further concluded that the majority's interpretation
of IPC's certificate indicated that appellant had been deprived of its
right to procedural due process when that certificate was granted in
1969. He stated that appellant was entitled to notice that IPC
intended to serve "'customers in Butte County'" before appellant's
right to serve those customers was limited by the grant of a
certificate to IPC, and that appellant had not been provided with such
notice. J.S. App. 19a. Finally, he found that "due to the lack of
support in the record" the Commission's substantive decision was
"arbitrary and erroneous as a matter of law, and a per se * * *
violation of substantive due process. * * * The IPUC's order clearly
has deprived (appellant) of its property without due process of law
and should be reversed" (id. at 20a).
ARGUMENT
1. a. Appellant seeks to invoke this Court's appellate jurisdiction
under 28 U.S.C. 1257(2), which provides that "(f)inal judgments or
decrees rendered by the highest court of a State in which a decision
could be had, may be reviewed by the Supreme Court * * * (b)y appeal,
where is drawn in question the validity of a statute of any state on
the ground of its being repugnant to the Constitution, treaties or
laws of the United States, and the decision is in favor of its
validity." Appellant states that "State public utilities commission
orders issued under delegated authority are 'state statutes' for
purposes of 28 U.S.C. Section 1257(2)" (J.S. 2-3).
Appellant is simply wrong in its view that this Court's mandatory
jurisdiction may be invoked in every case in which an order of a
public utilities commission is challenged on federal constitutional
grounds and the state supreme court sustains the order. It is "the
legislative character of challenged state action, rather than the
nature of the agency of the State performing the act, (that) is
decisive of the question of jurisdiction" (Lathrop V. Donohue, 367
U.S. 820, 824 (1961) (plurality opinion)). Only orders of state
regulatory commissions that are "made in the exercise of delegated
legislative authority" are "statute(s) of the State in the sense of
the jurisdictional provision" (King Manufacturing Co. V. City Council,
277 U.S. 100, 112 (1928) (emphasis added)). /6/ Accordingly, an
appeal to this Court will lie only if an order of a public utilities
commission sustained by a state court has "the characteristics of
legislation." Lathrop V. Donohue, 367 U.S. at 827 (plurality opinion);
see also R. Stern, E. Gressman & S. Shapiro, Supreme Court Practice
110 (6th ed. 1986).
The order of the Idaho Public Utilities Commission affirmed by the
Idaho Supreme Court is plainly adjudicatory, not legislative. The
Commission did not seek to regulate by promulgating rules to govern
the conduct of those subject to its power; instead the Commission's
order "disposed of * * * litigation between parties." Lathrop V.
Donohue, 367 U.S. at 827 (plurality opinion); see also King
Manufacturing Co. V. City Council, 277 U.S. at 104; Prentis V.
Atlantic Coast Line Co., 211 U.S. 210, 226 (1908). The Commission's
jurisdiction was invoked by a petition for a declaratory ruling and,
following an adversary proceeding, the Commission issued an order
providing that "upon the termination of the three-party contract * * *
(IPC) shall have the right to continue to serve (DOE)" (J.S. App.
51a).
Both the majority and dissenting opinions in the state supreme
court noted that "(t)his is not the ordinary public utilities case,"
but instead resembles a "contract dispute." J.S. App. 14a; see also
id. at 4a. Indeed, the "central issue" (id. at 8a) before the state
supreme court -- whether the findings upon which the Commission's
judgment is based are "supported by substantial evidence" (ibid.) or
whether they are "clearly erroneous" (id. at 17a) -- underscores the
quintessentially adjudicatory nature of this dispute. Cf. Lerner V.
Casey, 357 U.S. 468, 473 (1958) (an appeal does not lie where "the
constitutional questions before us relate primarily, and more
substantially, to the propriety of the findings made by (a state
agency) rather than to the validity of the provisions of the (law
under which it acted)').
b. Moreover, even if an appeal would otherwise lie in this case, no
"substantial federal question" was "timely or properly raised" in the
proceedings below (Sup. Ct. R. 16.10b)). This clearly was the
perception of four of the five Justices of the state supreme court,
who did not even mention the alleged constitutional ramifications of
the Commission's decision. See Fuller V. Oregon, 417 U.S. 40, 50 n.11
(1974) (failure of state court to address alleged constitutional
question creates a presumption that the question was not properly
raised).
Appellant's attempts (J.S. 9-10; J.S. App. 67a-71a) to find
intimations in the record of the presentation of a constitutional
question fall woefully short of showing that a constitutional claim
was presented "with sufficient definiteness * * * to say that the
court's attention was challenged thereto" (Live Oak Water Users' Ass'n
V. Railroad Comm'n, 269 U.S. 354, 357 (1926)). Rather, it is apparent
that no constitutional claims were "thoroughly discussed" until they
were raised by the dissenting Justice below (J.S. 10 n.6). Indeed,
before the dissent suggested otherwise, appellant conceded that it had
"no complaint that its procedural due process rights have been
violated" (Idaho Sup. Ct. Reply Br. 26). For the foregoing reasons,
the appeal should be dismissed.
2. Treating the jurisdictional statement as a petition for a writ
of certiorari (see 28 U.S.C. 2103), the petition should be denied.
The decision of the Idaho Supreme Court is entirely factbound. As
both the majority and dissent below pointed out, the facts of this
case are "unique" (J.S. App. 7a, 13a); because of "the peculiarities
of the situation" involved (id. at 9a), "(t)his is not the ordinary
public utilities case" (id. at 14a). Moreover, despite appellant's
efforts to dress its challenge to the Idaho Supreme Court's
construction of state law in constitutional garb, appellant has failed
to present an issue that comes close to warranting this Court's
review. /7/
a. The starting point in this case is the determination of both
tribunals below that IPC's certificate of public convenience and
necessity confers upon IPC the right to serve the Department of Energy
facility (see J.S. App. 9a, 46a). Appellant contends that these
decisions are wrong, that Idaho law actually conferred upon appellant
a property right to continue to serve the DOE facility, and that the
decisions below effect a deprivation of that property right in
violation of both procedural and substantive due process protections.
As a threshold matter, the interpretation of IPC's certificate is a
question of state law on which the Idaho Supreme Court's decision is
dispositive. And while this Court obviously is free to consider for
itself whether appellant had a property interest that was affected by
the IPC certificate, the state's highest court's interpretation of
appellant's interest should not lightly be cast aside. See Hughes V.
Washington, 389 U.S. 290, 296-297 (1967) (Stewart, J., concurring)
(deference to state court determination appropriate unless that
determination "worked an unpredictable change in state law"). There
is no basis for rejecting the Idaho Supreme Court's conclusion on this
record.
Appellant has pointed to nothing in Idaho law that confers upon it
the sole right to provide electricity to the DOE facility. Such a
property right would presumably be founded upon a provision of state
law barring the Commission from granting overlapping certificates of
public convenience and necessity, or permitting overlapping
certificates in only limited circumstances. But the Commission's
governing statute provides that the Commission may "attach to the
exercise of the rights granted by (a certificate of public convenience
and necessity), such terms and conditions as in its judgment the
public convenience and necessity may require." Idaho Code Section
61-528 (1976); see also Idaho Code Section 61-526 (1976) (authorizing
the Commission to act in a manner that is "just and reasonable" in the
event of a conflict between two utilities). No mention is made of any
requirement to grant exclusive service rights. /8/
The record of this case makes clear that overlapping authority is
not unprecedented: appellant and IPC both have certificates of public
convenience and necessity granting general authority for the provision
of electric service in four Idaho counties (see J.S. App. 42a-43a).
Appellant has failed to show that Idaho law limited the Commission's
authority to issue another certificate authorizing service to the DOE
facility if it found that the public convenience and necessity
supported that action, especially in view of the fact that IPC was
already providing the very serviced authorized by the certificate.
There is accordingly no reason to think that the Commission's decision
to issue such a certificate to IPC infringed any property right of
appellant.
Second, appellant has not shown any basis for disagreement with the
Idaho Supreme Court's conclusion that, as between IPC and appellant,
IPC has the right to provide service to the DOE facility. The court
quite reasonably concluded that where there are "two utilities with
valid certificates to deliver energy at transmission voltage, the
utility that is currently and satisfactorily serving the disputed area
may continue to do so" (J.S. App. 9a). /9/
b. The Commission noted that "the public interest factors weight
heavily in favor of" permitting IPC to serve the DOE facility, because
of "the cost to Idaho ratepayers of not allowing Idaho Power to
continue to be the sole supplier" (J.S. App. 48a). The Commission did
not rest its decision on that ground because IPC's certificate already
gave IPC the right to provide that service. However, this potential
alternate basis for the Commission's decision in favor of IPC
indicates that reversal of the decision below by this Court might not
affect the actual outcome of this case.
c. Wholly apart from the merits, appellant has presented no reason
why review by this Court is appropriate. As we have discussed, both
the majority and dissenting opinions below stress the fact bound
nature of appellant's claims. This case involves unusual questions
concerning the method of selecting the utility company that is
entitled to serve a single large customer where service previously was
provided by two utility companies acting in concert. There is no
reason for this Court to review the determinations of the state
commission and the Idaho Supreme Court.
CONCLUSION
The appeal should be dismissed for want of jurisdiction. Treating
the jurisdictional statement as a petition for a writ of certiorari,
the petition should be denied.
CHARLES FRIED
Solicitor General
JULY 1987
/1/ References to the Department of Energy include its predecessor
agencies, the Atomic Energy Commission and the Energy Research and
Development Administration.
/2/ The state supreme court erroneously stated that the facility
occupied 980 square miles.
/3/ Appellant has provided less than two percent of the electricity
supplied to the INEL under these agreements; it has, however,
supplied "standby capacity" (J.S. App. 3a). Since 1978, all of the
electricity supplied to the INEL has been generated by IPC (ibid.).
/4/ The Commission also found (J.S. App. 50a) that the public
interest weighed in favor of allowing IPC to be the sole supplier of
power to the INEL. It did not rest its decision on that finding,
however, because it concluded that IPC's "right to serve DOE" is clear
"regardless of public interest considerations" (id. at 48a).
/5/ The court also rejected appellant's argument that the IPUC
lacked jurisdiction to issue a declaratory ruling, reasoning that the
dispute in this case essentially involves contractual rights that may
appropriately be determined "'before or after there has been a
breach'" (J.S. App. 4a).
/6/ All of the decisions cited by appellant in support of its
jurisdictional claim involve legislative rules issued by state
regulatory commissions. See Atchison, T. & S.F. Ry. V. Public
Utilities Comm'n, 346 U.S. 346 (1953); Lake Erie & W. R.R. V. Public
Utilities Comm'n, 249 U.S. 422 (1919); Williams V. Bruffy, 96 U.S.
176 (1877).
/7/ Appellant's failure to raise the constitutional claims properly
in the court below also weighs strongly against review under this
Court's certiorari jurisdiction.
/8/ Appellant relies (J.S. 14-15) upon Cambridge Telephone Co. V.
Pine Telephone System, Inc., 109 Idaho 875, 712 P.2d 576 (1985), in
which the Idaho Supreme Court held that a certificate previously
issued for an unserved area could be revoked -- and authority to serve
that area awarded to another utility -- if the Commission acted before
the first utility began to extend its service to the area in question
(109 Idaho at 879 & n.2, 712 P.2d at 580 & n.2). Cambridge Telephone
is inapposite here because the Commission did ot revoke appellant's
certificate; it simply held that (1) a certificate could be issued to
IPC in respect of the service to DOE that IPC already was providing,
and (2) where two utilities have authority to serve the same customer,
the customer should be served by the utility that is already in fact
providing service to the customer.
The other Idaho decisions cited by appellant (J.S. 20) similarly do
not announce any rule indicating that these actions were improper in
the circumstances of this case. Appellant also cited (J.S. 16-18) a
number of decisions by courts of other states dealing with revocation
of certificates. Those decisions are irrelevant because the question
here is one of Idaho law.
/9/ Even if the decisions of the state tribunals infringed upon a
property interest created by state law, moreover, the judgment below
might be supported on the ground that there is no constitutional
violation. With respect to the claimed violation of procedural due
process, appellant does not assert that it did not receive notice of
the 1969 proceeding that culminated in the issuance of the IPC
certificate of public convenience and necessity, it claims only that
that notice was inadequate. Notice of the pendency of the proceeding
was indisputably all that the Constitution requires; an interested
party need not be informed of all possible consequences of that
proceeding in order to receive due process. With respect to the
substantive due process claim -- the assertion that the Commission's
action amounted to a taking -- appellant may not have suffered an
"interference with reasonable investment-backed expectations"
sufficient to amount to a violation of the Fifth Amendment because
appellant has not actually supplied any power to DOE since 1978
(PruneYard Shopping Center V. Robins, 447 U.S. 74, 83 (1980)).